Rising interest rates and an oversupply of houses for sale are turning parts of the country into buyer's property markets, according to recent reports from estate agents and surveyors.

Outside London and the Home Counties, house price growth has already slowed sharply. The latest regional breakdown by the Nationwide shows that in Liverpool, prices have been flat for a year, and in Newcastle and Birmingham they have risen by just 3 per cent.

The latest monthly survey from the Royal Institution of Chartered Surveyors also points to a weakening UK housing market, with the result that buyers have been able to negotiate prices down in some areas for the first time in months.

In Didcot in Oxfordshire James Scott-Lee, who represents Chancellors estate agency, says: 'A lot of property on the market [is on] at inflated prices. It is becoming a buyer's market as they have a lot of choice. Clients are having to be a lot more realistic with prices.'

The story is similar further north in Lincolnshire. 'There are tough market conditions with buyers having a lot of properties to choose from,' says Philip Barnatt of Lincoln-based agents Mundys. 'Correctly priced properties, however, still have a chance of a quick sale as there are still buyers out there. Asking price is therefore crucial.'

So how do buyers strike the right deal, and what can sellers do to improve their chances of getting a good price?

Buyers: take the upper hand

Five interest-rate rises in the last year have pushed the cost of mortgages up substantially. This has been enough to put off some buyers but also means that those who still want to buy should negotiate on price harder than ever.

On a mortgage at 6 per cent interest, repayments (on a capital and interest basis) over 25 years would be £1,288 a month on a £200,000 loan. If you negotiate the property price down by £10,000, payments drop by £64 a month.

'There are a lot of elements to property negotiation and too many people concentrate on price,' says Phil Spencer of Location, Location, Location fame and chief executive of property search consultancy Garrington. 'It actually starts when you first walk through the door to view the property via the signals you give off and the information you glean.'

Spencer says that research into the market is crucial and 'gives buyers the greatest strength at the negotiating table'. When a property market is very fast moving it is hard to find up-to-date and relevant prices, he says, but once it starts to stabilise buyers can look at prices over the last two months and make a more informed decision about what they should be paying.

Buyers should ask questions about a vendor's position: What are their motivations to sell? Are they looking for a quick sale? Have they already found a property to buy? And, crucially, how long has the property been on the market?

First-time buyers might not be in a strong financial position but, without a chain to hold them up, they are in a strong negotiating position. The most important thing of all, say agents, is for any buyer to have their mortgage sorted out before they start looking.

'It is crucial to have a mortgage agreement in place if you want to be taken seriously as a buyer. This is different from just talking to brokers and being told how much you could borrow,' says Georgina Bridges, branch manager of Barnard Marcus in Barnes, London. 'We often advise vendors to accept, say, £5,000 less if the offer is made by someone who has a mortgage in place, demonstrating that they are a keen buyer.'

Spencer says that in a buyer's market there is also a good opportunity to build up a 'buyer's package'. If buyers want fixtures and fittings included they should ask about this at the beginning of the process, he says, and should also try to set the timetable for completion.

He also suggests that buyers should make an offer based on exclusivity, so that once it is accepted the property is taken off the market and is no longer advertised anywhere, including the web. 'It's not a question enough people ask but I think it is absolutely reasonable. If an agent or vendor doesn't want to give exclusivity you have to ask why,' Spencer says.

So what sort of discount should you expect in a softening market?

'It depends both on your opinion about the value of a property and what your research tells you,' says Spencer. 'But imagine something which was valued in late May and put on the market in June and is still around now. If the market has cooled in your area it is now likely to have quite an ambitious May price attached, so be bullish when you put in an offer.'

Sellers: how to stay on top

'The key words are realistic expectations,' says David Smith, head of residential property at estate agents Dreweatt Neate. 'If, as a seller, you ignore the impact of the last five rate rises on buyers' finances you probably won't sell.'

Smith says that previously a £400,000 property would have been put on the market at £425,000 and then sold at or near to this higher price, but now vendors have to accept that they may only get £400,000 or close to that.

Bridges agrees. 'There has been some fairly ambitious pricing going on,' she says. 'This is fine in a fluid market but now overvaluing can put buyers off from even looking and sellers should bear this in mind.'

George and Louise Neill know what it's like to sell in a softening market. Their three-bedroom house in Brighouse, near Halifax in Yorkshire, has been on the market for a couple of months. 'At the beginning we had plenty of interest but in the last few weeks there has just been nothing,' says Louise. 'It's not just us having problems. Our agents tell us it's across the board round here.'

The property is on the market for £104,950. The couple have done their research on prices and believe this is already quite competitive. 'We've thought about dropping the price but what we are going to try first is to add a line to the marketing material saying 'all reasonable offers considered'. Every day you read the papers saying prices are shooting up but that is just not happening around here.'

'Kerb appeal' is much more important in a quieter market, says Bridges. 'You need to match, if not exceed, the level of appearance of the neighbour's properties, she says. 'Keep everything tidy and clean and, importantly, de-clutter, even if you have to hire some storage space to be able to do so.'

Smith points out that sellers shouldn't spend more on the appearance of the property than they would recoup through a sale, but, like Bridges, emphasises the increasing importance of first impressions. He also says that vendors should consider letting their agent manage all the viewings rather than doing it themselves. 'Prospective buyers often prefer to look at a house without the vendor present as they can take their time and there is not that sense of having to be polite,' he says.

Open days, when a property is viewed by multiple prospective buyers at the same time, are one way of creating a sense of urgency when the market is cool, say agents, but they do need to be managed in the right way.

'A few months ago we could run an open day with just a few days' notice from vendors,' says Bridges. 'Now it is crucial that the price of the property is right and that we get at least two weeks' notice to get enough buyers in. Managed in this way, an open day can be highly effective.'